An intractable cell type in lung development is the secondary crest myofibroblast (SCMF). Our present understanding of SCMFs is limited to only a descriptive outline of their biology. SCMFs occupy a specific and important topography, being localized to the tip of the secondary crest structure. As such, they are critical to the process of alveolization referred to as the culmination of lung development. And yet largely due to lack of specific and tractable markers they remain poorly defined. In effect, what we know about these highly specialized mesodermally-derived cells is that they express Pdgfr? and ?Sma; produce elastin, and participate in alveolization. Thus elucidating their ontogeny, isolating them as a cel population for functional genomics analysis and manipulating their genetic repertoire to uncover their precise role in alveogenesis are center stage for understanding distal lung development. Importantly, there is widespread recognition that such analyses are badly needed if we are to effectively address neonatal (e.g. BPD) and adult (e.g. COPD) diseases of the lung. This application is specifically tailored to address these needs. In preliminary data we demonstrate that Gli1- creERT2 driver mice represent a valuable tool for identifying, isolating and lineage tracing of SCMFs in the lung. We propose the following hypothesis and utilize this novel tool to address the emergent specific aims: Hypothesis: Hedgehog signaling constitutes a key instructional pathway in commitment of multipotential mesenchymal cells to ?Sma-expressing (?Smapos ) derivatives during lung development. Specific Aim 1: To Determine Whether Hedgehog Signaling is Necessary for Alveolar Formation. Specific Aim 2. To Determine the Mechanism by which Lack of PDGFA Blocks the ontogeny of SCMF & Alveolization.. Specific Aim 3: To Determine the Fate of SCMF in a Model of Hyperoxia-Induced Alveolar Hypoplasia. Specific Aim 4: To Determine the Genetic Signature of SCMF Progenitors by Transcriptomic Analysis.